Commodities trading in Kenya now runs on two distinct Capital Markets Authority licensing pathways, and which one applies depends entirely on how the trading actually happens. A centralised exchange with brokers trading on behalf of clients sits under one regime. A bilateral digital platform matching buyers and sellers directly sits under another, newer one. Getting this wrong is not a technicality: operating either type of business without the correct licence is a breach of the Capital Markets Act, and as of December 2025 the second pathway now catches platforms that were previously unregulated entirely.
What Counts as a Commodity Under Kenyan Law
The Capital Markets Act defines a commodity broadly: agricultural, livestock, fishery, forestry, mining or energy goods, or any product manufactured or processed from them, along with financial instruments and any index, right, or interest in such a commodity. A commodity contract includes spot commodity contracts, commodity futures contracts, and any other contract or class the Authority prescribes by regulation. A commodity market is any market or facility, electronic or otherwise, licensed by the Authority or operating on a centralised basis, where offers to buy, sell, or exchange commodity contracts are regularly made. These definitions matter because they determine whether a given trading arrangement needs a licence at all, and if so, which one.
Pathway One: Commodity Exchanges and Brokers
The first pathway is the one most people picture when they think of commodity trading: a centralised exchange operating a trading platform, with licensed commodity brokers acting as intermediaries for clients. This is governed by the Capital Markets (Commodity Markets) Regulations, 2020, and covers matters specific to that model, including exchange operating rules, broker conduct requirements, and the licensing process for both categories. We cover this pathway in detail in our guide to commodity exchange and commodity broker licensing in Kenya, and businesses planning to operate or trade through a formal commodity exchange should start there.
Pathway Two: The New OTC Platform Licence
The second pathway is newer and considerably broader in what it catches. The Capital Markets (Licensing Requirements) (General) Regulations, 2025, which came into force on 11 December 2025 and repealed the 2002 licensing regulations, introduced a licensing category that did not exist before: the over-the-counter, or OTC, platform. An OTC platform is defined as a trading system with multiple user access that allows trading of commodities, currencies, or securities, whether listed or not, or other instruments, directly between two parties without a central exchange or broker in between.
This is a meaningfully different structure from a commodity exchange. There is no centralised order book, no broker intermediary, and no exchange membership system. What the regulation targets instead is the platform itself, the digital infrastructure that lets two counterparties find each other and transact directly. Any person who wishes to establish, maintain, or operate such a platform for commodities (or currencies, or unlisted securities) must apply to the CMA for a licence. The application must include the applicant’s certificate of incorporation, memorandum and articles of association, management and shareholder details, audited financial statements, a description of the digital trading platform itself, a code of conduct and trading rules covering matters like membership requirements, which instruments may be traded, procedures for suspending trading, order cancellation, and clearing and settlement, and the prescribed fee.
The fee structure for this category is set out in the regulations: a KES 10,000 application fee, a KES 100,000 licensing fee, and a KES 100,000 annual regulatory fee. Unlike several other licence categories under the same regulations, there is no separate minimum paid-up capital threshold specified for OTC platforms in the regulations themselves; the general “fit and proper” and business plan requirements apply instead.
The code of conduct and trading rules an applicant must submit are not a formality. The regulations require the rules to specify membership requirements for the platform, which instruments may be traded on it, the procedure for adding new instruments, how trading in a given instrument is suspended, how orders are cancelled, how clearing and settlement is handled, and how the platform itself is supervised. For a commodity OTC platform, this means the operator needs a working answer, in writing, to questions like how a disputed trade is unwound, what happens if a counterparty defaults mid-settlement, and who is responsible for verifying that a listed commodity contract is genuine before it can be traded on the platform at all. These are operational questions as much as legal ones, and they need to be resolved before the application is filed, not worked out afterward.
Applicants also have access to the same “approval in principle” mechanism available across all licence categories under the 2025 regulations. Where the Authority is satisfied that an application substantially meets the prescribed requirements, it may grant approval in principle, which lets the applicant set up operating facilities and recruit staff without yet being permitted to commence live trading. This is useful for a platform still finishing its technology build, since it allows the compliance and operational tracks to run in parallel rather than sequentially. An approval in principle is only valid for six months, however, so it is not a substitute for completing the full application in good time before the transitional deadline.
Why This Matters Now
The transitional provisions attach a hard deadline to this. Any person operating an OTC platform, including one trading commodities, that was not previously regulated must apply to the Authority for a licence within one year of the regulations coming into force, which puts the deadline at 11 December 2026. Existing licensees under the old regime keep their licences, but must meet any new requirements the 2025 regulations impose within that same twelve-month window. For a digital agricultural commodities platform, a bilateral energy trading arrangement, or any bespoke matching system connecting commodity buyers and sellers outside a formal exchange, this is the first time such activity has been brought within the CMA’s licensing perimeter at all.
This also changes the practical question a founder or operator needs to ask. It is no longer enough to confirm that a business is not operating a commodity exchange and does not need broker registration. The relevant question now is whether the business operates any digital, multi-user system that lets two parties trade commodities directly, because that description alone is enough to trigger the OTC platform licensing requirement, regardless of transaction volume or how the business describes itself commercially.
Investor Protection and Market Integrity
Both pathways sit within the same overarching Capital Markets Act framework, which exists to protect investors and maintain market integrity. Licensed intermediaries across categories contribute to the Investors Compensation Fund, which exists to protect clients from financial loss if a licensed broker, dealer, or other intermediary fails to meet its contractual obligations. The Authority also retains broad enforcement powers, including market surveillance, mandatory reporting, and the ability to impose significant financial penalties for serious breaches.
What This Means in Practice
Anyone currently operating, or planning to launch, a commodity trading arrangement in Kenya should first identify which of the two structures actually describes the business: a centralised exchange model with broker intermediation, or a direct multi-user trading platform. The two require different applications, different supporting documents, and in the case of the OTC platform category, sit under a regime that simply did not exist before December 2025. Existing informal or offshore-hosted commodity trading platforms serving Kenyan users should treat the 11 December 2026 deadline as a firm compliance date, not an aspirational one, given the Authority’s enforcement powers under the Act.
For tailored legal advice on commodity market licensing, OTC platform applications, or the wider capital markets framework, consult our regulatory compliance practice. Our guide to Capital Markets Authority licensing in Kenya covers the full range of CMA licence categories, and our guide to commodity exchange and commodity broker licensing in Kenya sets out the exchange-based pathway in detail.
